FRANKFURT—Germany took steps to ramp up LNG imports on May 5 as it moves away from piped Russian supply, renting four floating storage and regasification units (FSRUs) and choosing the North Sea port of Wilhelmshaven as the first handling hub.
Demand for FSRUs has risen sharply as governments across Europe scramble to find quick ways to secure more LNG. They are a key part of Germany’s strategy as it will take time to build more permanent LNG terminals.
Europe’s biggest economy currently relies on piped Russian gas for almost a third of its supply, imports which totaled 142 Bcm in 2021. Berlin has said it could take until summer 2024 to end its reliance on Russian gas.
Germany committed to chartering two FSRUs on May 5 through utility Uniper and to two 10-year deals with Norwegian vessel operator Hoegh LNG to be completed by September or October, which will be operated by Uniper rival.
The northern deep sea port of Wilhelmshaven will be the first location to receive seaborne LNG in the winter of 2022-2023, to be shortly followed by Brunsbuettel in Schleswig-Holstein.
The Economy Ministry last weekend said it wanted four FSRUs to speed the diversification of the country’s energy in the wake of Russia's invasion of Ukraine.
Economy Minister Robert Habeck told reporters in Wilhelmshaven the terminals were part of the plan “to become independent of blackmail by Russia. A day like this makes me confident that it can work,” he said.
The government has earmarked 2.94 billion euros for the FSRUs and plans to pass legislation shortly to give permits for the infrastructure.
“I believe the date, end-2022, early-2023 is technically realistic for the commissioning of the LNG landing point,” said Hanns Koenig, an analyst with Aurora Energy Research. “But you have to get the gas.”
Habeck has recently visited gas producing countries including Norway and Qatar, looking for alternatives to Russia.
The first of Germany’s FSRUs will anchor in Wilhelmshaven, with a capacity of 7.5 Bcm per year, equivalent to 8.5% of total German gas demand.
The other three will each have at least 5 Bcm capacity, a joint statement by the Berlin economy ministry and Lower Saxony’s environment ministry said.
The two Uniper ships will be chartered from vessel supplier Dynagas.
The gas arriving in Wilhelmshaven will be fed into Germany’s pipeline grid via links to be provided by Niedersachsen Ports GmbH & Co. KG and in close cooperation with Uniper, which is investing 65 million euros ($68.82 million) in the project.
A connection line from the port to existing long-distance gas transport pipelines and underground storage caverns is being built by regulated pipeline company OGE.
In the longer term, the aim is to be able to switch to renewable gas and clean hydrogen at the site, in line with Germany’s climate protection commitments.
“Using LNG contradicts the government’s target of climate neutrality,” said the managing director of the German arm of Friends of the Earth (BUND), Antje von Broock.
Recommended Reading
SM Energy Targets Prolific Dean in New Northern Midland Play
2024-05-08 - KeyBanc Capital Markets reports SM Energy’s wells “measure up well to anything being drilled in the Midland Basin by anybody today.”
Vår Selling Norne Assets to DNO
2024-05-08 - In exchange for Vår’s producing assets in the Norwegian Sea, DNO is paying $51 million and transferring to Vår its 22.6% interest in the Ringhorne East unit in the North Sea.
Crescent Energy: Bigger Uinta Frac Now Making 60% More Boe
2024-05-08 - Crescent Energy also reported companywide growth in D&C speeds, while well costs have declined 10%.
SLB OneSubsea JV to Kickstart North Sea Development
2024-05-07 - SLB OneSubsea, a joint venture including SLB and Subsea7, have been awarded a contract by OKEA that will develop the Bestla Project offshore Norway.
Chevron, Total’s Anchor Up and (Almost) Running
2024-05-07 - During the Offshore Technology Conference 2024, project managers for Chevron’s Anchor Deepwater Project discussed the progress the project has made on its journey to reach first oil by mid-2024.